3. You are given the following present value factors at 12 percent, the Three-City Plastic Company's minimum desired rate of return. (11 points, 3 points section d and 2 points sections a-c and section e) Present Value Present Value of End of Period of $1 an Annuity of $1 0.89286 0.89286 0.79719 1.69005 0.71178 2.40183 JaUAWNE 0.63552 3.03735 0.56743 3.60478 0.50663 4.11141 0.45235 4.56376 The Main Street Sanitation Corp is considering the replacement of a piece of equipment. The old equipment has a book value of $143,000 and a remaining estimated life of seven years, with no salvage value at that time. Currently it could be sold for $96,400. The new equipment will cost $475,000, including transportation and installation. It has an estimated life of seven years, with no salvage value then. Yearly cash operating costs is $200,000 for the old equipment while the new equipment is expected to cost $114,000 to run annually. a. Compute the present value of the operating cash outflows for the old machine. b. Compute the present value of the operating cash outflows for the new machine. c. Compute the present value of the cash operating savings if the new machine is purchased. d. What is the net present value of the replacement alternative (remember that the salvage would lower your cost when considering whether to purchase the new piece of equipment or not)? e. Should the equipment be purchased, why or why not (should be based on your work in d)